<p>^^True, it was 10 years ago.</p>
<p>I’m just amazed that a mortgage lender qualified them for a mortgage loan given the mountain of student loan debt they both bring to the table. Yet another indication that our mortgage system is still seriously out-of-whack. If the lender had included the real cost of being in full repayment on the student loan debt, it would be hard to believe that they would have qualified for much of any mortgage.</p>
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<p>Yup, I could have chosen BUTerrier95.</p>
<p>BU had financial and other problems in the 60s and John Silber was hired to turn the place around and that’s what he did but you can imagine how schools operate when under a lot of financial pressure compared to schools that have a plush endowment. The feeling that I have is that you go to BU, pay your money, get your diploma. Many that I know that went to BU don’t particularly identify with the school. I think that it’s due to their money focus many years ago - they did what they had to in the 70s, 80s and 90s. I recall that BU did a tremendous amount of recruiting in Asia in the 1990s. There’s a Thai restaurant in Cleveland Circle that we used to frequent and it was always packed with Asian students when we were there.</p>
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<p>Back in the day, a 25 yo was lucky to have his own apartment. Most of us had roommates.</p>
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<p>He indicated buying in March 2008 and having good credit scores – looks like he got one of the last loans before the mortgage crisis began to be recognized as a crisis affecting the entire mortgage industry, rather than being limited to subprime lenders and borrowers.</p>
<p>Pathways, I don’t doubt that this can be a smart choice, but the key phrase in your post was “making payments on a 10-year plan.” As opposed to “deferring forever on the 50-year plan.”</p>
<p>It’s too bad we scared Jonathan away – I’d like to ask whether he’s got a balance on his credit cards, too.</p>
<p>“Most of us had roommates.”</p>
<p>I STILL have a roommate! And my mortgage is more than half paid off. :)</p>
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<p>I hope you mean that studying and learning fit in there somewhere… your sentence makes it sound like a diploma mill…</p>
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<p>Yes, of course.</p>
<p>There’s a feeling of being connected after you graduate from BC that isn’t there with BU.</p>
<p>Heck of a deal.
He’s doing what we’re doing…
Without knowing the types of loans that OP has other than the direct/stafford loans, it would be wise for OP to pay the minimal amount to amortize the loans.</p>
<p>OP borrowed when there was inverted interest rates.
Currently, his interest rates are so low that it would be wiser for him defer repayment to fund 529 (only if there is a immediate tax credit), 401k, and just plan old investment accounts. </p>
<p>In DS’s time 2002-2006, he/we borrowed close to $100K, and we were full pay. Beginning interest rates were ~4.5% and ended at 1.5%. Consolidated in 2006 and with ontime payments, the interest rates are now 2%. DO you think DS/I want to ever payoff these loans? This guy is in the 28% marginal tax bracket, loan interest is tax deductible without need to itemize. OP should delay amortizing loan as long as possible-If he does payoff his loans, his education was wasted.</p>
<p>I reserve corrections until the full disclosure of loan conditions.</p>
<p>All purchases have an emotional component (this is why marketing consultants exist) and none more than a college education. Johnathan has no reason yet to regret his decision - if he’s lucky he never will. Those of us who are much older than he is know well educated people who were once in his shoes and are now unemployed, enjoying early retirement as the economic downturn moved the most expensive employees onto the unemployment line only to replace them with younger, cheaper, newer fresh faced models - like Johnathan.</p>
<p>I can remember buying a new car when my kids were little, circumstances right around the corner made me sorry I didn’t either stick it out with the old car a little longer or buy a cheaper used model…but that was a very small financial mountain to climb (over in 3 years) compared to the virtual lifetime of debt this family is putting on the back burner.</p>
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<p>When we bought our first home at age 27, the mortgage lender allowed us to roll our student loan balance into the mortgage loan, which at that time, gave us a much better interest rate on the student loan balance and made all of the interest deductible. </p>
<p>OP apparently didn’t do this. I hope we haven’t scared him off, because I would love to hear his rationale for dealing with the student loan balance in the future.</p>
<p>He has been out of college far too long to still have that much debt. It will come back to bite him.</p>
<p>I wonder if Jonathan’s mortgage is underwater?</p>
<p>His loan probably is underwater. Probably a variable, lucky guy.
He’s smiling greatly.</p>
<p>Concerning student loans.
His government subsidized loans are at 3% fixed. and for a typical 15years amortization-or interest only, indefinite. Many repayment plans available, can be changed as many times as you want. Direct loans currently at 4.5% fixed. </p>
<p>His private (?) student loan is libor +4.85%. Libor (01/04/2012) 6mn=1.55%; Thus his then $69,000 loan, based on todays fix is =6.40%, typically amortized 25 years. Again repayment can be interest only,indefinite. Payment plan can be changed easily, as many times as you want. Current PLUS loans 2011-12 = 8.5%.</p>
<p>OP’s loan interest rates in 2007 is lower than today’s new loans. And if he maintained his loans with consolidation and as written, his loan cost is lower today than 4 years ago.</p>
<p>LongPrime,
Your overview is a bit too complex for me! If you can net out how you see OP paying off his loan, given how you perceive his circumstances, I would appreciate it.</p>
<p>I don’t really care when and how OP pays off his loans, as long as he does it. We taxpayers don’t want to be left holding his bag.</p>
<p>Hanna hit the nail on the head,
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<p>Bay, we are holding the bag for direct & stafford loan upto 2010 when Obama took government guaranteed student loans out of the hands of private lenders. An experiment started by Clinton, perpetuated by Bush, and finally stopped by Obama. </p>
<p>Tell me why us parents and DS should pay off 2% student loans when that same money can be used to buy I-bonds or Treasuries yielding 3%+. Especially when the marginal tax bracket is 25%+. IOW, the real interest rate of these student loans is 1.5%. (OP’s real interest rate is .72 of 3.0%=2.16% gov guaranteed loans, 28% marginal tax bracket).</p>
<p>Don’t really know OP’s current situation, hence my qualifier in the earlier post. But if he took the most optimal repayment plans, then he would have chosen the plans that I described. - Interest only.</p>
<p>^I get that he shouldn’t pay off loans with interest rates lower than his investments earn. But he will need to pay them off sometime. Are student loan terms truly indefinite? I’m surprised at that.</p>
<p>Can be, at least the old plans could be.
Fixed mortgages could be essentially indefinite, because you are not in default if you only pay interest. Financial institutions holding and servicing mortgages are loathe to foreclose and reprocess-</p>
<p>OP is in the financial business, he should know his p’s and q’s.</p>
<p>A 1% difference is hardly a reason to put off paying debt. Do you think this guy, or most people actually don’t pay off debt and instead invest, and after loads and capital gains and make out better? It’s a myth. It’s a shell game if you think you actually have any net worth if you owe more than you have in the bank. </p>
<p>The three biggies that can bring down college students - excessive drug/alcohol use, indiscriminant sex, debt and not understanding how to manage money. I don’t care how well educated you are, if you don’t know how to avoid the fallout from those three issues, you will have a tough road to hoe.</p>